Question

Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May: Select the accounting equation elements (Assets, Liabilities, Owner's Equity) affected by the transaction. Then, in the "Direction" column, select the impact ("Increases" or "Decreases") on the accounting equation element. Lastly, select the specific account within the accounting equation element that is affected. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by $18,000; Owner's Equity (Katie Wyer, Capital) increases by $18,000.
Element Direction Item
1. Received cash from owner as additional investment, $18,000. Asset Owner's Equity Increases Increases Cash Katie Wyer, Capital
2. Paid advertising expense, $4,850. Liability Increases Katie Wyer, Capital
3. Purchased supplies on account, $2,100. Liability Decreases Accounts Receivable
4. Billed customers for delivery services on account, $14,700. Liability Increases Accounts Payable Liability Decreases Delivery Service Fees
5. Received cash from customers on account, $8,200. Asset Increases Cash Asset Increases Accounts Receivable

Answer 1

Answer:

1. Transaction: Received cash from owner as additional investment $18,000

Accounting equation element: Asset and Equity

Direction: Cash increases Equity increases

Account:  Cash and Wyer capital

2. Transaction: Paid advertising expenses $4,850

Accounting equation element: Asset and equity

Direction: Cash decreases Equity decreases

Account:  Cash and equity

3. Transaction: Purchase supplies on account $2,100

Accounting equation element: Asset and Liability

Direction: Asset increases Liability increases

Account:  Supplies and Accounts payable

4. Transaction: Billed customers for delivery services on account $14,700

Accounting equation element: Asset and Equity

Direction: Asset increases Equity increases

Account:  Accounts receivable and equity

5. Transaction: Received cash from customers on account $8,200

Accounting equation element: Asset and Asset

Direction: Cash increases and accounts receivable decreases

Account:  Cash and accounts receivable